Comments on: Publisher Strategies and Devastating Opportunity Costs

By: Kristen McLean

Kristen McLean — Mon, 13 Aug 2012 14:04:46 +0000

I think Thad’s point is a good one, and I think it’s important to distinguish between large “generalized” houses that feature the roll-up of many different imprints and smaller, more vertically oriented houses that CAN cultivate end-user followings because they have a clear brand and content mission. Think McSweeny’s, Chronicle, and the excellent examples like Tor/Forge mentioned by Peter above. The irony for the big houses is that the conglomeration of the 80’s and 90’s–and the attendant “economies of scale”–were supposed to make them more competitive. Now that undifferentiated mass is their Achilles heel, and I predict we will see a substantial cutting of that legacy overhead as well as some kind of return to niche branding before we’re done. The question is, can those big publishers move as quickly as they have to? My opinion is that publishers should focus on the core editorial work of making great content for the mass market. They serve the mass market very well. They should leave the creation of a disruptive discovery engine or retail mechanism to another player. They lack both the market position and the innovation to create the next big platform on an individual basis, and the DOJ issue prevents them from doing it together. If they don’t develop an understanding that they hold the top of the publishing pyramid (the mass market) so they can consolidate their focus and efforts there, those small presses and disruptive service providers below them are going to eat their lunch one tasty bite at a time.

By: Thad McIlroy

Thad McIlroy — Tue, 31 Jul 2012 02:04:25 +0000

When in doubt I usually call in the music industry to set my head straight.

Record companies –should– have direct relationships with people who buy music. Some do; the largest ones don’t.

The issue is specialization. If a publisher specializes in a particular kind of book, or a record company specializes in a particular kind of music, they can create a community of interest. If not, they can’t. There’s nothing implicitedly shared with a company that publishes history, poetry, novelles romans AND cookbooks.

I think most publishers should just get on with it and do what they do best: add value to an author’s best efforts and help to make an author’s work known.

By: Peter Turner

Peter Turner — Mon, 30 Jul 2012 22:53:41 +0000

In reply to Peter McCarthy. Totally. But if I had to do just one thing and do it well, my focus would be delivering passionate customers/readers to authors. The other orientation potentially requires that authors choose between readers/customers ans publisher services (all of which can be increasingly bought as needed). But that's easy for me to say, what with little skin in the game.

By: Peter McCarthy

Peter McCarthy — Mon, 30 Jul 2012 18:40:14 +0000

In reply to Peter Turner.

Thank you for the comment, Peter. I agree completely. I like that you focus on delivering sales volume to authors as the key factor to success. If that can remain/become the key mission than I think a great deal of focusing will occur naturally. The hard part is to be future-looking and strategic at the same time as driving sales growth. Building the engine to maximize sales now might find one ill-equipped for two years down the road. I’ve often advocated for explicit R&D (non-editorial R&D) within publishers but I’m not certain that’s the answer. What I do know is that initiatives often get prioritized based on different criteria — this project to grow sales, this one to extend consumer reach, this one to enhance author relations, and so on. My concern with publishers having this approach — and of course not all do and the degree varies — is that no one thing gets outsized attention, focus, and resources the way, say, the Kindle did at Amazon. In a funny way, I’m sort of starting to think that it’s either consumers or authors and each publisher needs to make its bet and then superserve. Doing so will naturally serve the other. I think that will be more successful than a little for everyone. Obviously, I am still formulating on this…

By: Peter Turner

Peter Turner — Mon, 30 Jul 2012 17:14:09 +0000

I think you’ve framed the challenge/opportunity issue really clearly here. While I agree that the “only two constants in the publishing value chain are authors and readers” these constants of course have profoundly different dependencies and opportunity costs.
I’m not good with economics either, but it seems to me the winners in the publishing value-chain will be the marketing platforms that deliver sales to authors. (This is after all the value that publishers traditionally provided by getting print books in bookstores.) If you can deliver sales, authors will follow. To my mind, this means that publishers–whether they are also retailers as well or not–are in direct competition with Amazon. The measure of publishers’ relative success will be first based on sales volume and, only a distant second, on author services (editorial, production, design, and SaaS that publishers dream up).
For what it’s worth, the reason why I’m such a strong advocate of direct sales is because of the need to own the customer experience in order to increase the long-term value of having captured that customer. I don’t think there’s any good data on this, so it’s a supposition, but my feeling is that the cost of the necessary marketing efforts in the digital space will require that publishers capitalize on that long-term value.
Now, I’m not saying that the large, general trade publishers are in a good position to accomplish this, far from it, and I appreciate why they’re hesitant to move too quickly to compete directly with their #1 retailer. But I find it hopeful that MacMillan’s Tor/Forge, Sourcebooks, O/R Books, and others, are going in this direction. I’d also be willing to bet that BookCountry, GoodReads, and other middlemen will move in the direction of direct retailing.